The 11th hour has arrived regarding finances - can anyone please help 🙏

[Inamesswithmoney]

Can't sleep and using a fling away name for this thread.

I honestly don't know what to do regarding our finances. Think we are in around £40/50k of debt. Self employed earning enough to pay the bills and getting topped up by universal credit.

Can anyone help how we can bring in more income and cut back on spending?

1sr of all have you done a budget? What is the debt?

Would getting a job pay more? Downsizing? Sell a vehicle?

@Ph3 not done a budget very much burying head in sand. Debt is car on finance, covid bounce back loan, credit cards, catalogue, dwp tax, council tax think that's it.

@MayaPinion a job wouldn't pay more. We rent so can't downsize. We do have a car worth £7k we could sell, however I am really anxious to go down to one car as we are extremely rural.

You probably need to talk to one of those debt management charities. I'm sure moneysavingexpert.com could point you in the right direction.

Can one of you get a second job? Even a couple of nights a week in a pub would help.

But you need to draw up a budget. You are clearly living beyond your means. There are organisations like StepChange that can help. If you don't address the budget issue things won't improve and will probably get worse.

You say you are self employed earning enough to cover bills... But you aren't, are you. You aren't managing to cover your costs because you are sliding into debt.
How sure are you of what your income really is? I wonder if you aren't earning as much as you think.

THE DEBTS - You may be able to negotiate with creditors to let you pay back over a longer period. e.g. Bounce Back loan may be extended to a 10 year repayment period rather than the normal 6 years. The longer you take to pay, the more it costs due to interest charges. Have you checked you are getting all the benefits to which you are entitled? It sounds like you need help to come up with a realistic budget and plan. Don't use any of the commercial advisers that charge you a fee. There are excellent charity and government funded debt advice organisations such as Step Change.

HIGHER EARNINGS - I really feel for you as a rural resident. Realistically,if you are on Universal Credit long term, even one car is going to be unaffordable and that can make finding work impossible.. You have to look at increasing self-employed earnings by increasing the volume of business or increasing the amount you charge. Diversification can mean adding quite small extra services e.g window cleaner offers gutter clearing. Apart from that, is there any chance of you both taking on part time or seasonal work? If you can't earn more from self employment,you'll need to bite the bullet on this. Bus driving,care work,and hospitality all offer shifts. I know a number of people who are self employed who work the equivalent of full time on shifts that let them continue their own business too.

Speak to Stepchange. I've been there, I was in a lot of debt and it got to the point where I was borrowing more to repay what I'd borrowed and was short every month. I was stressed, couldn't sleep and became depressed.

I spoke to Stepchange and it was like a weight had been lifted. They helped me budget, put me on a debt management plan and deal with all the creditors for me so I didn't get any more letters from them chasing me. I'm now a few years in and my debt is almost paid off. I've had no issues and they have always been so kind and helpful and never judgemental. Honestly, give them a try. Look on their website or give them a call. You are not alone. It's never too late to sort it x

The debt charities would advise you on the details but the starting point is to face up to what you’ve done to have got into this position. Be brave and also be curious. Be willing to change the way you live. Above all be honest.
You might start by telling us in a nutshell why you owe so much money…?

Write down ALL your outgoings. Everything.

Write down ALL your debts. Everything

Write down all your income

Contact Citizen's Advice or Step Change and book an appointment to sort it all out

You will need to stop creating debt, obviously

Agree that it sounds like you're using debt to fill a gap between your incomings and outgoings.

It could also be that you're scrimping on the cost of essentials to pay the debt repayments, so spending less than a sustainable amount on food and other essential purchases.

You say that you wouldn't earn more if you were employed, but you'd have your employer pension contributions, paid annual and sick leave etc. What's your current income?

You need advice from a debt charity based on a full picture of your income and outgoings etc.

Have a look at Moneysaving Expert, make sure you have an accurate and sustainable budget with provision for annual and irregular expenditure like insurances, car maintenance, Christmas etc and then seek advice. Have a look at:

https://www.moneysavingexpert.com/loans/debt-help-plan/

Take a look at Dave Ramsey. He’s American but has a system you can follow.

@Inamesswithmoney first thing to do is to draw up a budget. List all of your outgoings and then see what you have left. Be realistic but make sure you’re not spending on any luxuries. I’m sorry to say but take aways and luxuries have to go. Any car on finance should be sold and then pay back the money to the finance company. By a run around car for now. If you haven’t already arrange payment plans so you don’t have debt collectors knocking on your door. If after you have done your budget you realise there is no money left over then you need to make a plan, second job, better paid job. If there is money left over start paying the smaller debt first and keep going from there.

What is your self employment?

When you say 'self employed' are you limited company? Could you liquidate the company and thereby not be liable for bounce back loan?

You can't actually be earning much through self employment if you're getting universal credit top ups?

Get in touch with CAP (you don't need to be a Christian!). They will provide you with helpful, non judgemental advice, work out a thorough, detailed budget and a time frame to sort out your debt. They will contact your creditors on your behalf.
Like a PP said about StepChange, they will lift a huge weight from your shoulders and enable you to see light at the end of the tunnel. Good luck.